General Norms, Individualized Decisions and Procedural Fairness

Economical Mutual Insurance Company v. British Columbia (Information and Privacy Commissioner), 2013 BCSC 903 is a very interesting case.

An insurance company pulled up the credit score of an applicant who was applying for a renewal of his policy. The individual complained to the Information and Privacy Commissioner that he had not consented to the company accessing his credit score.

A paper hearing was duly held by the Commissioner (through a delegate). Numerous insurance companies intervened. The notice provided was in the following terms:

1.         Issues – At the inquiry, the Information and Privacy Commissioner or her delegate will consider whether the organization was authorized by PIPA [Personal Information Protection Act] to collect the complainant’s credit information to assess risk prior to providing him with homeowner’s insurance.

The company argued for a narrower scope, which focused on the fact that a renewal was sought by an individual who had previously made a claim, and the Commissioner took note of this submission.

Ultimately, the Commissioner concluded that the company had not given adequate notice to the individual. The Commissioner's conclusions, however, were quite far-reaching:

[130]   For the reasons set out above, pursuant to s. 52(3)(e), I require Economical to cease collecting and using personal information in contravention of PIPA.

[131]   Pursuant to s. 52(3)(a), I require Economical to provide all home insurance policyholders who have not been provided with adequate notice, and all present and future applicants for home insurance, with notice that a credit score based on their credit information may be obtained for the purpose of assessing future risk of loss in connection with underwriting their policies. It must provide this notice before collecting any credit score based on their credit information for this purpose.

No information about consents received from other customers of the company was before the Commissioner. One could say that the Commissioner used the individual complaint as a springboard to lay down a general norm of conduct.

Goepel J. held that this was a breach of procedural fairness, because it exceeded the terms of the notice given to the parties:

[81]        While the insurer’s right to collect the information raised a general question applicable to all policyholders, the consent issue did not. The consent issue was focussed on the particular consent that the Complainant had given. It did not raise the issues of the consents that other policyholders may have given and no evidence was led concerning such consents.

[89]        I find that the Delegate breached the duty of procedural fairness when she imposed remedies in regard to consents that were not in issue in the Inquiry and when she failed to give Economical the opportunity to make submissions on those remedies.

On the surface, this conclusion is plausible. But I think it takes too narrow a view of the role of administrative decision-makers. In particular, it supposes that there is a clear line between laying down a general rule and reaching an individualized decision inter partes.

Here is what I wrote a few months ago in a paper that touched on this issue:

First, decisions both reflect and establish norms. A decision does not spring full-formed from the womb of an administrative decision-maker; it must draw its shape from some ulterior source. And once released into the world, a decision too has normative consequences. It becomes (or at the very least, can become) an indication of the norm a decision-maker has applied and intends to apply. Individualized decisions can set standards just as effectively as general norms can. Second, both decisions and norms are Janus-faced. They look to the past and to the future. Decisions almost always look to the past, because they seek to impose consequences on events that have already taken place. For norms, the past is a source of standards embodied in previous decisions and the location of mischief sought to be regulated. Norms almost always look to the future, because they seek to impose consequences on events that have not yet taken place, and to shape future actions of targeted individuals or groups. For decisions, the future is important too, because a decision has a lasting effect on the conduct of an individual or group subject to it, and on the conduct of those who learn of the decision. Thirdly, in terms of clarity, accessibility and precision, qualities usually associated with norms, individualized decisions are just as clear, accessible (always to the parties and sometimes to the community at large) and precise. Indeed, given that they focus on concrete parties and concrete events, decisions may be clearer, more accessible and more precise than individualized decisions.

I am not sure that intensive review for a breach of procedural fairness is appropriate in the present context, given the difficulty of making the necessary clear distinction. On the facts, ordering the company to go back and check other consents was reasonably foreseeable once the policy-making role of the Commissioner and the norm-generative character of individual decisions are appreciated. Procedural fairness was used here as a stick to beat the Commissioner when the real question was whether the decision was substantively unreasonable.

Goepel J. also found the orders in question to be unreasonable, but for largely the same reasons he found a breach of procedural fairness:

[114]     Having determined that Economical had the right to collect CPLS scores, the Delegate then had to determine whether the 1996 CSIO form adequately disclosed the purpose for collecting the Complaint’s credit information. Having concluded it did not, the Delegate had to then determine the appropriate remedy. The remedy had to relate to the issues before the Delegate. Those issues did not include notice to or consents given by other policyholders. An order requiring that Economical review all policies to determine whether consents had been given was outside the scope of the inquiry and the Orders were not within the range of possible outcomes.

It may be that the appropriate outcome was to strike the orders down as unreasonable, given the burden they imposed on the company. A better result might have been for the Commissioner to make an order in respect of the particular case but to signal clearly that the deficiencies in the consent received were likely to have infected other customers. Either way, the general nature of the individualized decision is inescapable. Which also suggests that the focus on procedural fairness was misplaced in the present case.